Under COBS 2.2.3 of the FCA Handbook, the Firm is required to make a public disclosure in relation to the nature of its commitment to the Financial Reporting Council’s (“FRC”) Stewardship Code or, where it does not commit to the Code, explain its considered choice based on the Firm’s investment approach.

The Code aims to enhance the quality of engagement between asset managers and companies to help improve long-term risk-adjusted returns to shareholders and promote the efficient exercise of governance responsibilities. It also describes steps asset owners can take to protect and enhance the value that accrues to the ultimate beneficiary and sets out a number of areas of good practice on engagement with investee companies to which the FRC believes institutional investors should aspire.

The Principles of the Code

As administered by the Financial Reporting Council (FRC), the UK Stewardship Code 2026 (the “Code”), effective from January 1, 2026, defines Stewardship as "the responsible allocation, management and oversight of capital to create long-term sustainable value for clients and beneficiaries,"

The Code introduces a streamlined framework for asset managers and owners, reducing the previous 12 principles (from the 2020 Code) to six core Principles to which all signatories must adhere. Those principles may be summarised as follows:

1. Integrating Stewardship and Investment: Signatories must integrate stewardship considerations into their investment decision-making and portfolio management to deliver long-term sustainable value for clients and beneficiaries.

2. Promoting Well-Functioning Markets: Signatories should identify and respond to market-wide and systemic risks (such as climate change or financial stability risks) to promote a well-functioning financial system.

3. Engagement: Signatories engage with issuers and other stakeholders to maintain or enhance the value of assets. This principle consolidates previous separate principles regarding engagement, collaboration, and escalation.

4. Exercising Rights and Responsibilities: Signatories must actively exercise their rights and responsibilities, such as voting rights at shareholder meetings.

5. Selection and Oversight of Managers: Signatories must integrate stewardship considerations into the selection, appointment, and monitoring of external asset managers.

6. Monitoring Service Providers: Signatories must monitor and hold to account third-party stewardship service providers (e.g., proxy advisors or investment consultants).

Signatories must submit to the FRC a Stewardship Policy and Context Disclosure every four years (covering governance, resources, and conflicts of interest) and an annual Activities and Outcomes Report (demonstrating how the Principles were applied over the preceding 12 months).

UK Financial Reporting Council’s Stewardship Code / Shareholder Rights Directive II

FCA COBS Rule 2.2.3R requires FCA authorised firms to disclose the nature of their commitment to the FRC’s Stewardship Code (the” Code”) or, where it does not commit to the code, its alternative investment strategy. Adherence to the Code is voluntary.

In addition, under COBS 2.2B.5 of the FCA Handbook, the Firm is required under the Shareholder Rights Directive II (“SRD II”), to develop and publicly disclose an engagement policy that meets the requirements of COBS 2.2B.6R, or where it has chosen not to develop an SRD II Engagement Policy provide a clear and reasoned explanation.

 

Whilst the Firm supports the objectives underlying the Code and SRD II, its investment strategy is primarily focused on a diversified portfolio of public market instruments across multiple asset classes and regions. Accordingly, the Firm has decided not to commit to the Code at this time and has not established a formal SRD II Engagement Policy.